Counting data cost on mobile phones

According to billmonitor.com most people spend more than they need to on their mobile phone contract.

We all understand the price of a five-minute phone call. But five minutes spent on a social network, or checking an email account, is a lot more difficult to attach a value to.

Did you upload photos, open an email attachment or watch a video clip? That same five minutes can vary wildly in terms of how much data you use depending on how you actually passed the time.

Most fixed mobile phone contracts include a monthly package of free minutes and data use. Once that limit has been reached, the bill can soon rocket, with some providers charging 35p per minute for calls and £5 per megabyte (MB) of data.

Website billmonitor.com has analysed over two million UK phone bills and founder Dr Stelios Koundouros said the fear of accruing these extra costs is driving many people to take out contracts which are far bigger - and more expensive - than they actually need.

"People are really afraid to go over their allowance so they pick a contract they feel covers them no matter what," he told the BBC.

"Mobile price plans become significantly expensive if you exceed your allowance - people try to avoid that but end up overshooting and that means wasting significant money on line rental."

Dr Stelios Koundouros claims that most people pay too much for their phone contracts.

Bill shock

Dr Koundouros claims that 74% of people who have had their bills analysed by his service since its launch in 2009 found they were paying too much.

He says that so-called "bill shock" - the unpleasant surprise of a very large phone bill - is far less common than people cautiously over-paying for phone allowances they do not use, and that confusion about data use is a prime reason for this.

"It's pretty hard to know what you're using," he said.

"That's the number one piece of feedback."

In a report released last year billmonitor found that half of the smartphone users on its database were using less than 154MB per month but 88% had at least 500MB for free in their call plan.

They also had 600 free minutes, but were only using around 150-200 minutes.

"People make a really basic guess and then their usage can change over time," said Dr Koundouros.

"Data use is on the increase. We've observed that the longer you have a smartphone the more data you consume. Over the last 12 months average data usage has increased from 200MB to 280MB."

Itemised data

Eldar Tuvey is CEO of Wandera and Snappli, two companies which offer data compression services to individuals and corporate smartphone users.

He compares it with "flat packing a kitchen" and says while there is sometimes a compromise on quality, especially when streaming data intensive high definition video, it is more efficient and economical.

"Data is now 43% of the total bill," he said.

Eldar Tuvey says that streaming video is the most data intensive activity

"Some people expect it to be 70% in a couple of years' time. Others think it will go to 100% as voice moves over to data through apps like Facetime, text moves to data through Whatsapp and other messaging apps. Soon your whole bill will be data."

Mr Tuvey thinks the solution lies in itemised data bills.

"In terms of voice - we've had itemised billing for ages," he said.

"But when you go to YouTube or Facebook it doesn't say, 'this will cost you 23p for five minutes'. Part of our service is to give visibility to that data so employers can see which apps are being used, which websites are being used, how much that costs on an itemised basis."

Video is "the number one hogger" of data according to Wandera and Snapply's figures.

"After that it's social networks, then it's a bunch of news apps and sites, email is only 12%," said Mr Tuvey.

"One employee was a lawyer in Dubai and wanted to watch the Grand Prix. He watched the Formula 1 for two hours and came back with a bill - I think it was £14,000. We are trying to eliminate that sort of shock."

Set alerts

John McCann, phone and tablets expert at tech news and reviews website techradar.com, has some straight forward tips for keeping data use down.

"Protection in the phone's operating system itself is really useful," he said.

Android phone users operating the latest version of the platform, Ice Cream Sandwich, can set both monthly data limits and alerts in the "settings" section of the device.

Phone expert John McCann advises setting alerts and limits on the handset itself

When the handset nears the limit set by the user a message appears on screen, and if the limit is reached the data function disables itself for the rest of the 30 day period.

"Networks also offer their own apps to show you how many minute and texts you send and more importantly how much data you have used."

Mr McCann advised using public wifi wherever possible and played down security fears about such networks.

"A lot of wifi networks have log-in pages which require a certain amount of personal information but if it's run by someone like BT Openzone or The Cloud, they are reputable companies and not likely to do something reckless with your data."

He also suggested taking out a 30-day rolling contract which is easier to tweak as usage becomes more habitual.

A spokesperson from O2 told the BBC it offers a number of ways for customers to track their data usage.

"Our advisers will ask a series of questions to determine how a customer will use their phone. Based on the answers, they'll recommend a tariff that's best suited to their needs," he said.

"We're always happy to talk to customers who want to discuss their monthly allowance usage. They can also keep track online or through the My O2 app which can help monitor usage and control spend."

Everything Everywhere (EE) also said it offers an app and phoneline service for customers who wish to check how they are using their call plans.

"The rise of the smartphone means that data allowances are just as important as the call minutes and texts included in a plan," a spokesperson said.

"EE's plans offer unlimited calls and texts and a choice of data allowances."